Financial markets were plunged into major turmoil Friday after Britain's stunning decision to leave the European Union, sending the British pound to one of its largest single-day losses and touching off sweeping stock sell-offs amid a suddenly reordered fiscal world.
U.S. stocks are plunging in early trading.
The Dow Jones industrial average dropped 500 points, or 2.8 percent, to 17,515 in the first few minutes of trading Friday.
The Standard & Poor’s 500 index fell 57 points, or 2.7 percent, to 2,056x. The Nasdaq composite sank 158 points, or 3.2 percent, to 4,751.
It was the biggest drop for U.S. stocks since September.
Bond prices rose sharply. The yield on the 10-year Treasury note dropped to 1.56 percent from 1.75 percent a day earlier, a huge move.
The domino-style panic - first Asian markets diving and then spreading to Europe and Wall Street - were widely seen as just the opening blast in what could be months or longer of upheaval as traders and investors access the fallout from Britain's EU break.
Among the immediate shock waves are the deep uncertainties injected into stock and currency markets in a whiplash effect after Wall Street and other exchanges rose in recent days on confidence that Britain would remain in the 28-nation bloc.
The wider questions, which could reverberate through markets for the rest of the year and beyond, include potential blows to both the British and EU economies as the relationship begins to unravel, and how it all could ripple through a global economy facing other challenges such as low oil prices and a slowing Chinese economy.
"We think the time has come to consider that a financial market crash today may push a world economy teetering on the verge of a contraction over the edge," said Carl Weinberg, chief economist at High Frequency Economics.
London's FTSE 100 exchange nose-dived in the first minutes of trading and then clawed back some ground. Other big losers included the main stock indexes in France and Germany, which was bottoming out in ranges near its worst one-day drop.
Clem Miller, a portfolio manager at U.S.-based Wilmington Trust, said investors were caught off-guard by public opinion polls that showed Britain would likely remain in European Union.
"Financial markets react to unexpected but also high magnitude events," he said from London. "This is a high magnitude event for financial markets."
The pound, meanwhile, slid more than 10 percent over six hours on fears that Britain's EU exit - known popularly as Brexit - will spur global financial instability. The pound was now worth less relative to the U.S. dollar since at any point since 1985.
In London, Prime Minister David Cameron - a leading voice to remain in the European Union - said he would step down because of the result. But even as he gave a timetable for his own exit by the fall, he sought to offer immediate reassurances to worried markets, calling Britain's economy "fundamentally sound" and saying there would be no immediate changes in the status of immigrants in the country.
Mark Carney, governor of the Bank of England, also moved quickly to assure investors. "We've taken all the necessary steps to prepare for today's events," he told reporters. Carney added that British banks have been stress-tested "against scenarios more severe than the country currently faces."
On Wall Street, stock market futures early Friday morning pointed to losses of about 3 percent or more for the major U.S. indexes. The blue-chip Dow Jones Industrial Average was poised to open down more than 500 points. The broader Standard & Poor's 500-stock index and tech-heavy Nasdaq also were poised to drop.
In Asia, stocks suffered across-the-board losses. Tokyo's Nikkei closed down 7.9 percent, and Hong Kong's Hang Seng index tumbled 2.9 percent. The Chinese yuan dropped to its lowest level since 2011.
"We are extremely worried about the risks to the global economy as well as financial and foreign exchange markets," Japan's finance minister, Taro Aso, told reporters.
Angus Nicholson, a Sydney-based market analyst for IG.com, summed up the historic ramifications of the vote as changing "the calculus of global markets."
In the run-up to the referendum, many economists predicted that a "leave" vote would be a direct hit to trade and investments in Britain, including with the United States as one of the country's biggest investors. Many American firms use London as a gateway to trade with the rest of the European Union.
The International Monetary Fund, meanwhile, predicted that, in a worst-case scenario, a "leave" vote could reduce economic growth by up to 5.6 percent. The predictions of global economic strains were reflected in oil prices, which dropped below $50 a barrel for U.S. benchmark crude.
"The vote to leave the European Union is bad news for the U.K. economy, certainly in the near- and medium-term," wrote Howard Archer, a senior economist at IHS Global Insight. "Major economic and political uncertainty will be a fact of life for some considerable time."
Xinhua, China's Communist Party-controlled newswire, speculated that a Brexit vote would put downward pressure on global markets, potentially causing China's markets to drop at least 5 percent.
After the 'leave' vote, Chinese analysts warned of short- and middle-term instability, but downplayed risks to China's economy.
"The economy of UK will not collapse. Neither will the euro. It will likely be a one-time blow. If other countries start to follow suit of U.K., though, the euro will have to deal with blows constantly," said Lu Zhengwei, a senior economist at Industrial Bank Co.
Some analysts even began speculating that the U.S. central bank would have to cut interest rates, just six months after raising them for the first time since the recession amid hopes that the recovery had solidified.
Beyond the immediate turmoil in financial markets, economists said impact of Britain's decision could take years to trickle through the rest of the global economy. Analysts at Morgan Stanley estimated the vote will reduce U.S. growth by 0.6 percent over the course of 2017.